Business Studies · May / June 2020 · Paper 12 · Question 2

MLC makes motorcycles. The Managing Director has been analysing MLC’s costs. An extract of this information is shown in Table 2.1. To reduce average costs, MLC plans to close its factory and relocate production to another country. Only 50 of the existing employees will be offered jobs at the new location. The trade union has been informed. All the new employees will be given either on-the-job training or off-the-job training. This planned relocation will have an impact on MLC’s income statement. Table 2.1 Cost and other information for MLC’s current factory (2019) Total output (units) 3000 Total cost $1200000 Number of employees 200

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